Still in it, but time is ticking away, since it is a pure Options play, in fact a RiskReversal with a net credit.
My RiskReversal consists of 2 sold Puts and 1 bought Call, which is unusual for me. Normally I would just sell 1 Put and buy 2 Calls, benefitting from the SKEW, to give the expected move a extra boost for profits. But as a human like you, I maybe was just too greedy and I wanted this trade and...there's a plan behind the story and it goes as follow:
If you look at the Payoff-Diagram, you can see that I only lose money if price go's below $10.
If price reaches my bought Call with the strike at $12, then I make $100, and above even more.
A drop below the 10's would mean, that I would observe the trade very closely - considering to close it if price does not cooperate.
And as a special tweak, I calendarised the whole strategy.
This means, that I bought the Call further out in time. It cost me more, but it also gives the trade more time to survive.
If for example time progresses and the market ist still somewhere between $10 and $12, the bought Call would loose all it's worth = I would lose money.
To play against this problem, I just sell another 1 or 2 Puts to extend the time for the trade. In detail this means, I collect the full Credit for the sold 2 Puts, and that makes up for the time losses for the Call.
Additionally it widens my B/E point to the downside. And on top, I bought this RiskReversal for a net credit which means, that if price stays above $10, I could even close the trade for a net profit of around $23 minus const's.
So, its not even as bad as it looks now, even if we all are lurking for immediate gratification §8-)
Learn To Earn And Never Stop.
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